Are you a tax-smart donor?
When you make a cash donation of more than $10 to United Way of Chatham-Kent, you will automatically be issued a tax receipt to include with your federal tax return. It’s an incentive that benefits both the donor and the organization, and just one of the ways to be a tax-smart donor.
But there are other ways to reap great rewards at tax time as well. Consider these options when thinking about how to maximize your giving this season:
Stocks and securities
When you sell your stocks and securities, you incur a 50% tax on any capital gains. However if you DONATE stocks or securities, you not only completely eliminate any taxable capital gains, but you are rewarded with a tax receipt for the full amount of the donation! This system of giving is becoming more and more popular as savvy and generous donors take advantage of the dual impact a donation of securities provides. Francis Glenn, of Glenn Seeds Ltd. in Blenheim explains why he chose to donate this way to the United Way:
“We chose to give to the United Way of Chatham Kent because we know (our donation) benefits the community directly. And a gift of securities is the most tax-efficient way to give, as it eliminates any capital gains tax. That means more money for the United Way that we love, and a greater tax credit for us.”
United Way of Chatham-Kent can accept any publicly-traded securities, including shares, bonds, and mutual fund units. We recommend that you always speak with your financial advisor before initiating any type of securities donation.
Will Power and a legacy of giving
Leaving a donation to the United Way through Will Power not only allows you to make a significant and lasting impact in your memory, but it reduces the tax burden on your estate—sometimes eliminating it completely. There are several ways to leave a legacy gift, from earmarking a specific percentage of your estate to be donated, to choosing to make a “residual gift,” constituting the balance of wealth that remains after all desired or fixed obligations are met. For instance, you could determine how much money you want to leave to loved ones and any other accommodations, then donate a remaining percentage of funds. There is no reason to deprive loved ones in order to give, and in fact, thanks to the tax reductions associated with donation, you may leave your relatives with even more of your assets than you had expected.
The bottom line:
Your charitable tax credit reduces the amount of federal and provincial income tax that you may pay. The system rewards extra giving – the more you give, the larger your tax credit and the less income, capital gains, or estate tax you pay!
December 17, 2021 – the last day to make a securities donation in order to qualify for a 2021 tax receipt.
December 31, 2021 – the last day to make a cash donation over $10 in order to qualify for a 2021 tax receipt.